Bummer 2012 Box-Office Raises Critical Questions for Movie Biz

Moviegoers might have been stunned by last weekend's headlines citing the worst box-office numbers since the weeks after 9/11, but no one in the movie business is hitting the panic button.

Steady revenue streams have never been part of the studios' game plan, and seasonal dead zones at the box office have been a reality for decades.

In a summer of extreme highs and lows — "The Avengers" posted the best-ever opening and "Oogieloves in the Big Balloon Adventure" posted the worst-ever start — one more set of crazy numbers didn't shock insiders.

"If we're seeing those same numbers in the middle of November, then I'll be worried," Chris Aronson, Fox's head of distribution, told TheWrap.

Indeed, a comparison of this year and ten years ago shows that the sky isn't falling. This summer's grosses were down from 2011, but by less than 3 percent, though attendance fell nearly 5 percent. In 2002, grosses rose 7 percent from the year before, and attendance was up by 4.5 percent. And in the big picture, theaters still drew more people last year than all the theme parks and major sports in the U.S. combined, according to the Motion Picture Association of America.

But that said, the summer's admissions figures — 100 million fewer tickets were sold this summer than in 2002 — and recent poor box-office performance do raise some critical questions.

>> With the internet, videogames and dirt-cheap streaming, have movies become a luxury item? Box-office grosses would be as far down as admissions if it weren't for the increasingly higher ticket prices. The average cost of a ticket has risen to $8.12 — a long way from the $5.80 of 2002 — and premium pricing on 3D and Imax presentations pushes them even higher.

>> Will fall 2012 be as uneven and underwhelming as this summer? "Bourne Legacy" was the last movie to open to more than $40 million, and that was a month ago. Some fall releases, like "Paranormal Activity 4," could hit those numbers, but the next film likely to hit the $40 million mark is the new James Bond romp, “Skyfall” (photo, right) — on Nov. 9. Lionsgate will open "The Twilight Saga: Breaking Dawn (Part Two)" the following week, but that means it could be nearly three months between $40 million-plus openings.

>> Isn't anyone thinking about scheduling? Maybe it's time for studios to stop cramming the fanboy films into summer, and all the Oscar-bait films from Thanksgiving to Christmas, and think about spreading around the wealth.

Lionsgate has capitalized on the soft season. With two weeks of “Expendables 2” and then “Possession,” the studio had the No. 1 movie at the box office for a month. They’re relatively low-budget films and hardly blockbusters, but they’ll be profitable.

“We’ve made a concerted effort to put pictures into September, October and November,” Richard Fay, Lionsgate’s president of domestic theatrical distribution, told TheWrap.

>> Why are there so many poor box-office performers? It sounds simplistic, but the one thing studios, theater owners and consumers agree on is that if the product is good, the audiences will come. This year, with a few exceptions, the product hasn't been particularly strong. Or at the very least, it has been too familiar.

“There are just too many movies that are similar,” Patrick Corcoran, director of Media and Research for the National Association of Theater Owners, told TheWrap. This summer did have more than its share of sequels and superhero movies, but on the other hand, they comprised six of the season's top ten films.

He also said that Hollywood’s pursuit of mega-hits is hurting the overall business.

“The studios are trying to hit too many home runs and not enough doubles and triples,” he said. This sequel- and superhero-packed summer was down despite the presence of two movies — “The Avengers” and “Dark Knight Rises” — that rank among the 10 biggest money-makers of all time.

While there may be a dearth of blockbusters this fall, there are several films that should produce some of those extra-base hits. Among them are the Jennifer Lawrence horror film "House at the End of the Street" (Sept. 21) from Relativity, Sony's animated "Hotel Transylvania" (Sept. 28), Fox's "Taken 2" Oct. 5), and Paramount's third "Paranormal Activity" sequel (Oct. 19).

The scope of the movies isn't the only problem, according to Corcoran, it's that so many are the same-old, same-old. At least its seemed so this this summer.

“When you don’t have enough varied product in the market, the chances of something surprising catching fire go down,” he said, pointing to Universal's “Ted,” which made $216 million domestically, as an example of a film connecting because it was different.

The top 10 lists of both this year and 2002 include Spider-Man movies and a "Men in Black" sequel. There was an Adam Sandler film, "Mr. Deeds,' on the 2002 list, but this year's Sandler film, "That's My Boy," was a flop.

That same sort of creative thinking would be helpful when it comes to scheduling releases, he said, and others agree.

“The studios have to start thinking of a 52-week release schedule,” Phil Contrino, editor-in-chief at BoxOffice.com told TheWrap. He believes that studio executives’ current fascination with summer and Christmas was counter-productive. "Why take these big, expensive films and go head-to-head? it's a mindset that has to change."

Even Corcoran, who speaks for the theater owners, admits that while this is a difficult time to think about upsetting the release-date apple cart, it may have to be done.

“This is an industry that has thrived on and greatly rewarded risk-taking – when it succeeds," he told TheWrap. "But no one gets in trouble for doing things in ways that have worked in the past.”

Another reason that the studios are reluctant to gamble with dates is the uncertainty in the home-entertainment market. Back in 2002, DVDs could make up some of the revenues if a theatrical release misfired. With those returns withering, the stakes on theatrical releases have risen.

The timing of the video-on-demand and subsequent DVD and Blu-ray releases come into play as well. A summer tentpole release can play theaters for a couple of months, move to VOD and then hit DVD shelves by the holiday season. That time frame wouldn’t work for an October release.

Audiences have changed since 2002, as well. NATO’s Corcoran thinks that’s where the internet and social media have the biggest impact.

“Consumers are so much better informed these days,” he said. “A decade ago, the studios could largely control the message with their marketing. Today, with consumers getting so much info from so many other sources – good and bad — a studio has to really work if it wants to be heard. That not only makes marketing movies trickier, it makes it more expensive.”

Most in the industry remain confident in the long-term health of the business, and point to the recession as an overarching reality that affects consumer spending and the willingness of the studios to take more risks.

They note that the movies not only survived but thrived, once they adjusted to the widespread popularity of television in the 1950s, then cable TV and home video. All of those were at one point seen as major threats, but eventually may in fact have increased interest in moviegoing.

And they realize that this is a critical juncture for the industry.

“More than ever before,” said Lionsgate’s Fay, “the studios and the exhibition industry are going to have to work as partners, because they’ve got to find a way to get people off the couch and back into theaters.”